MrSavage - 4:20 pm on Sep 30, 2012 (gmt 0)
I'm not sure but could this update be as simple as Google saying, well site A ranks #1 for that term, so why shouldn't they rank #1 also in image search? Seems cut and dry but I see some of that now. I'm hoping someone can verify that. If you have PR, you are trusted on Google search, and isn't this as simple as making the algo behave the same way with images? This would partially explain to me why it's been so devastating to a person like me.
It also seems that not all image searches have yet been updated. In fact some searches don't have the hover effect that shows the site url and the page 2 doesn't load but only has that spinning icon that it's loading. It doesn't load. I'm just seeing some sporadic issues and differences.
update: I think this is still rolling out. It appears broken to me because there is no preview effect and it's stuck on page 1. This is what I see on the keyword searches related to the my site which lost 70% of traffic.